Sunday, February 4, 2024

Understanding Inflation

Politicians love saying "inflation is down" and sometimes they are even telling the truth.  There is an awfully good chance that statement, if true, doesn't mean what you think it means.

It sounds like it means inflated prices have come back down. On the other hand, you know they have done no such thing. 

Inflation means rate of price increase, greater inflation means faster increase. "Inflation is down" actually means prices are rising more slowly than they were last month. last quarter, or whatever comparison period is being used. They are still rising, but not as fast. 

Just about the only price normal people ever see drop is the price of gasoline, it actually does vary both up and down, and has done so in the past year. Everything else that goes up stays up, and probably even goes higher, just more slowly.

So know that you are stuck with the current high price of groceries, nobody is even trying to get them lower. What you can hope for is that your income may rise to cover your increased costs of living. Hope is not a plan, however.